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description

Scandinavian Airlines (SAS) is an innovator of strategic environmental management in the airline industry. Being a first-mover can have both its advantages and disadvantages. This case looks at the airline's decision of whether they should invest in the best available environmental technology for a fleet of new aircraft that would serve them for the next 25 years. While the technology for these low-emission engines had been around since the 1970s, it had never really been commercialized. SAS was feeling pressure from the regulatory authorities with regards to potential new charges and taxes that could affect the future operating costs of the fleet. Despite these anticipated future costs, at the time of the decision, the director of aircraft and engine analysis for SAS could not make an economic case for the more expensive engines. The challenge was for the fleet development team to try to convince the SAS management team to spend the extra kr5 million (Swedish Kronor) per aircraft for the dual combustor engine. Given that corporations are faced with increasing pressure with regards to greenhouse gas emissions and climate change, this case study presents an opportunity for discussion and analysis of various environmental concepts including strategic environmental management, adoption of best available environmental technologies, the role of internal environmental leadership in a large corporation and the effect of market-based mechanisms to improve a sector's environmental performance. The case illustrates the complexities of environmental decisions in striking a balance between meeting ambitious commitments and dealing with real capabilities of companies and external pressures.

learning objective:

This case is suitable for upper year undergraduate students as well as graduate students in both business and environmental programs. It would also be appropriate for corporate training involving corporate environmental management. The case brings together analysis of strategic corporate decision-making with respect to internal influences such as corporate culture and leadership as well as external influences such as anticipated regulations and the use of market-based mechanisms to encourage environmental commitment. Basic knowledge of corporate sustainability issues is recommended. Some examples of courses for which this case would be suitable include: • Corporate responsibility/corporate greening • Strategic management • Policymaking • Environmental management • Organizational behavior • Business-government relations • International management • To get students thinking about how corporations balance relationships between stakeholders in environmental decision-making processes. • To develop analytical skills to determine how/why various influences, motivations and mechanisms affect corporate greening. • To encourage discussion about how far a corporation should go to fulfill its environmental commitment outlined in its corporate policy.

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